Following my invoking of the need for a paradigm shift, allow me to start answering your question by asking an additional one:
what shall be the offset or spread for those $20,000?
Speaking of Poloniex and ALPv2, I envision a maximum of few thousand USD ($2,000 - $3,000) each side at a quite small spread (<1%) provided by ALP.
The rest of the liquidity on the order book will provided by Nu funded NuBots, which operate at above 1% (e.g. at an offset of 1% and with parametric order book in parts way above 1%).
This way
-
CRFC helps ensuring that ALP has an incentive to provide a minimum liquidity (in difference to the dutch auction scheme)
- the costs for liquidity provision get vastly reduced; for Nu risking own funds is long-term cheaper than buying insurance
- Nu can directly influence the amount of funds on the book (as long as Nu liquidity managers execute transactions to fill gaps AND all NSR holders keep an eye on the liquidity!) and can directly protect the peg from failing
Under normal circumstances the combination of ALP and Nu funded bots is reducing the efforts for liquidity provision on Nu side (ALP have an incentive to keep funds there and balance sides), keeping the spread quite tight for small trading volumes and having sufficient liquidity for trading whales who don’t care about some percent offset when trying to bet against Nu.
But most importantly: this way Nu doesn’t have to rely on ALP to provide liquidity at any exchange; liquidity can be provided by Nu - following and evolving the “gateway idea” I spawned last year.
